Five9 reported third‑quarter 2025 revenue of $285.8 million, an 8.2% year‑over‑year increase that reflects a 41% jump in Enterprise AI revenue and a 80% rise in AI bookings. The growth is driven by strong demand from data‑center and cloud‑based AI deployments, while a large customer’s ramp‑down and a decline in commercial business revenue offset gains in other segments.
Adjusted EBITDA margin expanded to a record 25.1%, up from 19.8% in Q3 2024, as the company’s shift toward higher‑margin subscription services and operating leverage offset modest cost increases. Operating cash flow reached $59.2 million, underscoring the firm’s ability to generate cash from its subscription‑based model and support future investments.
Non‑GAAP earnings per share were $0.78, beating the consensus estimate of $0.73 by $0.05 (a 6.9% beat). The earnings beat was driven by disciplined cost control, a favorable mix shift toward higher‑margin AI contracts, and the absence of significant one‑time charges. Five9 also announced a $150 million share‑repurchase program, including a $50 million accelerated buyback, signaling management’s confidence in the company’s long‑term value creation.
For Q4 2025, management guided revenue to $294.7 million–$300.7 million, with a midpoint of $297.7 million that is slightly below analyst expectations. The guidance reflects a deceleration in overall revenue growth, particularly in the commercial segment, but the company remains optimistic about AI momentum. Full‑year 2025 revenue guidance was raised to $1.1465 billion, and non‑GAAP EPS guidance was increased to $2.94, with adjusted EBITDA margin expectations lifted to 23% from 22%. These adjustments indicate confidence in sustained profitability and margin expansion.
CEO Mike Burkland said, “We are pleased with our third‑quarter results, with Enterprise AI revenue growing 41% YoY and profitability increasing with adjusted EBITDA margin reaching a record 25%.” CFO Bryan Lee added, “Our share‑repurchase program reflects deep conviction in our long‑term growth opportunity, and we are raising full‑year guidance to reflect stronger AI demand.” The company acknowledges headwinds from a tougher commercial market and longer AI implementation cycles, but highlights tailwinds from AI adoption, Gartner leadership, and new large‑ARR deals with a U.S. card servicer, a hospital system, and a European mobile provider.
Investors reacted to the guidance softness and revenue deceleration, tempering enthusiasm for the strong AI performance. The market’s focus on the slightly lower Q4 revenue outlook and the broader commercial slowdown highlights the importance of sustained growth momentum, even as the company’s AI strategy and margin expansion remain compelling drivers of long‑term value.
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